health policies and the NHS

   The National Health Service (NHS) was set up in 1948, as a bureaucratic, centrally controlled system whereby health care was available to all on the basis of need, free at the point of delivery and funded by taxation. The NHS was based on a tripartite structure with discrete functions for general practitioners (GPs), hospital doctors and local authority medical officers. Significant advancements in medical technology and an ageing population have meant that demand for health care has continued to rise, causing serious funding difficulties. Hence, the priority of the Department of Health has been to obtain value for money in health care spending.

   By the late 1970s the NHS faced escalating costs and a growing sense of crisis, exacerbated by the industrial unrest and economic difficulties which characterized the period. The Thatcher government was committed to health service reform, highlighting the importance of primary care and the role of the voluntary and private sectors. In 1983, features of business management were adopted to improve NHS efficiency, including the creation of a supervisory board headed by the Minister of Health and the NHS Executive to oversee the running of the service. Further reforms in the 1980s included the deregulation of optical services and competitive tendering of catering, domestic and laundry services.

   The most radical change to the workings of the NHS came with the 1990 NHS and Community Care Act, which created the internal market to promote competition between those supplying health services. Large public hospitals could become self-governing trusts and were able to raise income and capital and set pay scales for employees. The Act also gave wealthier GPs the option to become fundholders, paid on a cost per case basis. Any savings made by fundholders could be reinvested in their practices.

   Widespread criticism continues to be levelled at the 1990 reforms, centred on the speed of change, paucity of funds for start-up costs, lack of operational guidelines and reduced equity of access to similar services. Market mechanisms could not compensate for underfunding, and genuine competition did not exist between health authorities and trusts as patients were unwilling to travel long distances. In 1993 the NHS had almost one million people on waiting lists, and funding was onequarter below the EU average. By the end of the 1997 financial year, two-thirds of NHS trusts were operating at a loss.

   Further reading

    Allsop, J. (1995) Health Policy and the NHS Towards 2000, 2nd edn, London: Longman.

   COLIN WILLIAMS